In a resilient move amidst market volatility, investors have flooded the Indian stock market with demat additions, crossing 46.84 lakh in January. Despite the wild swings after a major bull run, the number of new demat accounts surpassed the previous high set in December, showcasing unwavering confidence in the market.
- Over 46.84 lakh demat accounts added in January, marking a significant surge.
- Total demat accounts surpass 14.39 crore, reflecting a 3.4% increase from the previous month and 30.3% from last year.
- Despite market fluctuations, investor confidence remains high, with fresh demat account openings surpassing previous records.
Demat Account Surge: Total Number of Demat Accounts in India Reaches 14.39 Crore
Data from the Central Depository Service and National Securities Depository reveals that the number of demat accounts in India opened in January soared to over 46.84 lakh, a significant increase from the 40.94 lakh recorded a month ago.
The total demat tally now stands at 14.39 crore, marking a 3.4 percent rise from the previous month and an impressive 30.3 percent surge from a year ago.
Demat Account Additions Signals Growing Confidence in Indian Markets
Despite market volatility preceding events such as the Budget and key policy decisions, analysts maintain a positive long-term view. India’s structural growth, government continuity, and increasing financial literacy are cited as driving forces behind the record additions to active demat accounts.
This surge is particularly notable in tier II and III cities, indicating a broader participation in capital markets.
Tier 1 cities are the most developed and urbanised cities in India, such as Mumbai, Delhi, Bangalore, Chennai, Kolkata, Hyderabad, and Pune. They have a high population density, a large number of industries, and a high standard of living. Tier 2 cities are the smaller and less developed cities, such as Jaipur, Lucknow, Nagpur, Kochi, Indore, and Coimbatore.
The vibrant primary market, coupled with the ongoing IPO boom, serves as a strong motivator for investors to open zero brokerage demat accounts.
FOMO and Financial Literacy: Driving Forces Behind the Surge in Demat Accounts Additions
Analysts suggest that the rising trend in demat accounts is fueled by a fear of missing out (FOMO) among new investors attracted to India’s promising long-term prospects.
The surge is also attributed to heightened financial literacy post-Covid, increased capital market investments, and a notable rise in mutual fund investments through the demat route.
In summary, the continuous rise in demat accounts reflects the confidence of investors in India’s economic growth potential. Financial experts anticipate this trend to continue, driven by the market touching lifetime highs after every dip.
With a potential pre-election rally on the horizon and positive returns from the Nifty over the past eight years, investors remain optimistic about another year of strong returns. The market’s expectation is further heightened by global economic factors and the upcoming Reserve Bank of India’s policy decision on February 8.
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